How the 'yellow pages' test could curb out of control federal spending

Is the federal government doing too many things best left to private enterprise?

A group in Congress says "yes."

More than a dozen lawmakers, led by Rep. Pete Sessions (R-TX), formed the "Yellow Pages" Caucus to reduce the size of government by promoting greater reliance on the private sector to provide commercially available goods and services to the government and the American people.

The Yellow Pages Caucus believes in applying the "Yellow Pages Test" strictly and broadly to all federal activities. Today, the federal government owns and operates hundreds of activities that are commercial in nature. They are functions that are not inherent or unique to government, but rather they can be found in the Yellow Pages from small businesses on Main Street in virtually every town in America. It is the goal of the Yellow Pages Caucus to apply a test to every existing or newly proposed federal activity - if the activity is available from a private company found in the Yellow Pages, that activity should either not be a responsibility of the federal government and, instead, should actually be performed by a private firm under contract with the federal government. Or, another option, is that it at least should be subject to a public-private cost and quality competition to determine which is the best provider.

The Yellow Pages test has been successfully implemented by governors, mayors, and country commissioners across the nation, Republican and Democratic alike. "It is not the role of government to provide services. It is the role of government to see to it that services are provided," former New York Governor Mario Cuomo once said. The late columnist David Broder once called privatization an idea "no politician - liberal or conservative - can ignore." When Sharon Pratt Dixon became mayor of Washington, DC, in 1991, she sought advice from then-Chicago Mayor Richard M. Daley. "Privatize everything you can," he said. (See Innovators in Action for other examples of privatization in action.)

A variety of privatization techniques have helped local officials balance their budgets, hold the line on taxes, create private sector jobs, make government more focused and efficient, and see to it that services are provided at a lower cost.

Under the Federal Activities Inventory Reform (FAIR) Act, passed in 1998, agencies are required to annually inventory activities that are "commercial" in nature - those that could be subject to a Yellow Pages test. More than 850,000 federal employee positions are determined to be commercial out of a total federal workforce (not including Postal Service or uniformed military personnel) of 2 million, according to the agencies' own listing of commercial functions. A review of the inventories shows about 40 percent of the federal workforce is in commercial activities operated by a federal executive agency which provides a product or service that could be obtained from a commercial source; including such activities as mapping, computer programming, landscaping, photography, construction, laundry services, printing, auto repair and engineering. These are activities performed by federal employees in federal government agencies that duplicate and compete with the private sector.

The mission of the Yellow Pages Caucus will be to assure adherence to a policy, first implemented by President Eisenhower in 1955 (Bureau of the Budget Bulletin 55-4), that the federal government:

"...in the process of governing, the Government should not compete with its citizens. The competitive enterprise system, characterized by individual freedom and initiative, is the primary source of national economic strength. In recognition of this principle, it has been and continues to be the general policy of the Government to rely on commercial sources to supply the products and services the Government needs ... The Federal Government shall rely on commercially available sources to provide commercial products and services ... the Government shall not start or carry on any activity to provide a commercial product or service if the product or service can be procured more economically from a commercial source."

Simply subjecting all federal commercial operations to competition saves more than $27 billion annually, according to The Heritage Foundation. An analysis by the Business Coalition for Fair Competition finds the total cost of government operation, subsidy and management of activities that duplicate or compete with private, for-profit enterprises exceeds $517 billion per year.

The Yellow Pages Caucus will work to eliminate bailouts and government performance of activities best left to the private sector and end direct and indirect government subsidies that impede the ability of a competitive private market to flourish, create jobs, and contribute to society and the quality of live for all Americans. It will make government smaller and in line with constitutional principles.

In order to organize like-minded members of Congress, the Yellow Pages Caucus will be the leader, voice of, and organizer of proactive legislation, education, networking and policy initiatives to assure that the government utilizes the private sector to the maximum extent possible; fight unfair competition with and duplication of the private sector by government, universities, nonprofits and prison industries; and advance policies and legislation to assure that the U.S. government supports, rather than impedes, growth in the private sector and small business community. As each caucus member develops legislative proposals, others will provide support. The caucus will look at virtually every bill considered in the House as a vehicle for application of a Yellow Pages test provision.

Today, the federal government is too big to succeed. It cannot effectively perform the basic "governmental' responsibilities the government should provide. It cannot provide an essential safety net for the least fortunate among us. By attempting to be all things to all people, we have a government that is incapable of effectively doing those things the Constitution enumerates for "We The People."

Faced with a $1.4 trillion deficit in the current fiscal year and a total national debt of over $14 trillion and growing, the Yellow Pages Caucus is an idea whose time has come.

John Palatiello is the President of the Business Coalition for Fair Competition.